Life Settlements

senior couple

For Individuals

Why do people sell their life insurance policies? Most life settlements occur because the circumstances which originally prompted the purchase of the life insurance policy have changed. For example:

  • The policy owner no longer needs coverage
  • The beneficiaries of the insurance policy die before the person covered by the policy
  • A change in business ownership makes the policy unnecessary
  • The policy has not performed as expected or premium payments have become burdensome
  • A change in policy type or coverage amount is necessary to address current objective

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franklin-templtonThe fundamental reason for the rapid growth of the life settlement market is consumer value.

Financial Benefits

There are clear financial benefits to a life settlement. Life settlements offer policy owners an immediate and significant lump sum payment and relieve them from the burden of paying future premiums. The money can be used for:

  • Funding long term care
  • Maintaining lifestyle
  • Making gifts to heirs or charities
  • Achieving other financial objectives
  • Purchasing investments or other insurance products

What Life Insurance Policies Qualify

  • Must be at least 65 years of age
  • The face value of the policy is at least $100,000
  • The insured has experienced a deterioration in health since the insurance policy was issued; life expectancy is under 15 years
  • The insurance policy is in effect beyond the two year contestable period
  • Insurance policies that qualify include Whole Life, Universal Life, Joint Survivor, Term and Convertible Term

AARPForcasts show that over 25% of baby boomers will be unprepared for retirement and likely look to turn illiquid assets into cash.

Read our case studies to see how others have benefitted from a life settlement.

Did you know that 90% of life insurance policies lapse? Don’t stop paying because your situation has changed. Contact us for more information and a FREE non-binding evaluation.

Call us at 612-867-5959 or contact us online here.

Life Settlements for Businesses

For Businesses

Fact 1: Every year businesses make financial decisions that cost them thousands of dollars in lost money. Money that they were completely unaware was available to them. Every time a Key Man Life Insurance Policy is in place and the key person is not remaining with that company, the policy becomes unnecessary.

Fact 2: A Key Man Life Insurance Policy may no longer be needed or may be cost prohibitive to maintain. A sale through a life settlement may provide the following benefits.
Use as an alternative to surrendering or allowing a policy to lapse. Pay off a debt. Create funds to invest elsewhere. Increase the assets of your balance sheet. Reduce premium expenses.

Fact 3: Your key man life insurance policy is an asset. Just like a home, a life insurance policy is an asset that can be sold. The legal basis for the secondary market in the life insurance started in 1911 with the U.S. Supreme Court case of Grigsby v. Russell. With this case it was shown that life insurance had all the legal qualities of property which meant that life insurance could also be transferred in similar manner. Grigsby v. Russell set the rights that a policy owner could name the beneficiary, borrow against it, sell the policy and change the beneficiary.

Life settlements table

These columns illustrate several actual cases. There is no set percentage of face amount paid. Criteria such as premium amount, type of policy, age, health, and life expectancy of the insured affect the settlement offer.

Fact 4: The cash surrender value is not the market value. The reason is simple as to why your business should understand what the true market value of your policy is worth. If you are accepting the cash surrender value (CSV) on your insurance policy without considering the market value you may be leaving substantial money on the table.

Who qualifies for our services? General case specifications:

  • Insureds age 70+ or with health impairment.
  • Life expectancy range is generally 20 years or below.
  • Net death benefit in excess of $100,000
  • UL’s are ideal; but all policy types are considered, even term policies that can be converted to permanent insurance.

Read our case studies to see how businesses have benefitted from life settlements.

We have nearly 20 years of experience in the industry and offer competitive bidding to get you the best price. Contact us for more information and a FREE non-binding evaluation.

Call us at 612-867-5959 or contact us online here.